The European Parliament and EU Council have recently passed a new directive which aims to update copyright law for the digital era. Importantly, it introduces two controversial measures, commonly referred to as the "upload filter" and the "link tax". These measures provide copyright holders with extra instruments to monetise their work and bridge the "value gap".
The directive substantially improves the legal position of right holders in the digital market. For their part, information society service providers such as Facebook and YouTube will now have to put systems in place to filter copyright-protected content and to actively conclude licence agreements with right holders and publishers.
Member states must implement the directive by April 2021.
Development
The directive – also known as the EU Copyright Directive - aims to update copyright rules for the 21st century. Most copyright rules pre-date the internet, and are not well-suited to deal with today's issues. This directive aims to improve protection for copyright holders by creating instruments to monetise their work used by information society service providers (ISPs), and to consequently stimulate the creative industry. It also aims to safeguard the use of copyright protected works for private and scientific or educational purposes.
ISPs, governmental and non-governmental authorities and other stakeholders heavily criticised the draft directive. The initial proposal included a universal obligation for ISPs to conclude licensing agreements with relevant right-holders of the works that were user-uploaded to their platforms. ISPs were to take appropriate and proportionate measures to ensure protection of the works, which could include filtering software, popularly referred to as "upload filters". The draft directive also included an obligation for ISPs to remunerate publishers for the digital use of press publications, commonly referred to as the "link tax". This was heavily criticised because it was anticipated that ISPs would not be able to share news effectively, and because the exceptions were notoriously vague.
The Committee's draft directive was rejected by the European Parliament and then substantially revised. The amendments included the exclusion in Article 17 (formerly Article 13) of small ISPs with a turnover below EUR 10 million and offered those platforms a softer regime, in which they are required to act expeditiously upon complaints of copyright infringement. Article 15 (formerly Article 11) was also amended to exclude "individual words" of news articles being reproduced by ISPs. Although hyperlinks were already subject to an exception in the directive, they may still be protected by copyright law under existing European jurisprudence. The European Parliament approved the revised directive on 26 March 2019, followed by final approval of the Council on 15 April 2019. Member States have two years to implement the directive in national law.
Article 17: "upload filter"
ISPs perform an act of communication to the public when they provide access to user-uploaded copyright-protected works. As such, Article 17 now provides that ISPs can be held liable for copyright infringement by way of user-uploaded content. They must therefore conclude licencing agreements with copyright holders as ISPs often profit from copyright-protected works through viewership and ads for which they do not pay licence fees. Article 17 provides that copyright holders will now be compensated through these ISP licencing agreements.
Article 17 provides a "safe-harbour" exception. An ISP is not liable for copyright infringement if it can demonstrate that it:
- used best efforts to obtain an authorisation from the copyright holder;
- used best efforts to ensure the unavailability of the protected content;
- acted expeditiously to remove the flagged content; and
- used best efforts to prevent future uploads.